ITIL 4: Connecting key concepts – Part 3

The Service Value System

Welcome back! This post is the third in a series in which I connect the key concepts of ITIL 4.

In the last article, we briefly covered concepts such as multiple stakeholders, PESTLE, and the Four Dimensions of Service Management. In this article we will be looking at the service value system.

The service provider can be regarded as a system that converts demand from a myriad of sources into value for multiple stakeholders. ITIL 4 calls this the service value system (SVS) and describes five component parts that interact with each other and external stakeholders to co-create value.

The five parts of the SVS are:

Guiding Principles: These are recommendations on how to work, or make decisions, for example: focus on value, think and work holistically, or collaborate and promote visibility. Guiding Principles were first introduced in ITIL Practitioner in 2016. There are now 7 guiding principles in ITIL 4, including a new one: optimize and automate.

Governance: ITIL v3 covered Governance in the Service Strategy book focused on evaluating, directing and monitoring organisational performance but didn’t include it in the examinations. As a result, most practitioners weren’t exposed to the concept through training programmes. ITIL 4 repositions governance as a necessary component of the SVS that allows the provider to convert demand into value for one or more stakeholder.

Service value chain: This is a set of loosely coupled activities (or archetypes) that any service provider undertakes at some point (or even repeatedly). The service value chain is made up of six value chain activities – Plan, Engage, Design & Transition, Obtain/Build, Deliver & Support, and Improve. To put it another way the service provider – be it a developer managing a micro-service, or an enterprise delivering technology-enabled business services – will be engaging with external stakeholders, planning work, delivering and supporting live products and services, and so on. A journey through the Service Value Chain to convert demand to value is known as a Service Value Stream, and I’ll cover this concept in my next blog post.

Practices: One of the challenges with ITIL v3 was that although the guidance was quite vast (some might say too vast!), the reality was that most practitioners only saw small subsets, usually through the lens of training and exams or a consulting engagement. Thus, the world came to see ITIL as a process framework, which couldn’t be further from the truth! With ITIL 4, we moved the focus towards “practices”, which is a holistic view of the resources and capabilities needed to deliver service management work. Practices follow the Four Dimensions model and talk about:

Organisations & People

Value Streams & Processes

Information & Technology

Partners & Suppliers

There are 34 practices in total, many of which are new to ITIL 4, and there are some processes in ITIL v3 that don’t have an equivalent in ITIL 4. Fun insider titbit: Practices were referred to as capabilities in early drafts of ITIL 4. Our crack team of translation experts pointed out that the word capability doesn’t translate well into many of the languages AXELOS supports, and suggested “practices” from the ITIL v3 glossary.

Continual improvement: The entire SVS is in scope for improvement! It’s not just practices that can be improved – the way the organization works and makes decisions can be improved; the way the provider evaluates, directs and monitors its performance can be improved; certainly, the way the organization converts demand to value can be improved. We had many discussions in our Lead Architect Meetings about where to place continual improvement, and as a result you’ll see it both as a component of the system and as a practice.

In my next blog post, I’ll show how the service value chain and value streams connect to the products and services that co-create value with consumers – something we discussed at the very start of this blog series!

ITIL 4: Connecting key concepts video Part 3

What next?

The ITIL 4 framework, the latest evolution of ITIL, introduces new key concepts that enables you and your organization to deliver world-class IT-enabled products and services.

Visit our ITIL 4 Concepts page to read and watch the next in our blog and video series ‘ITIL 4: Connecting key concepts’.

Watch our animation ITIL 4: Connecting key concepts to discover how these key concepts of ITIL 4 come together to create a flexible and effective service management architecture.